Banning Bitcoin has thus far been mostly unsuccessful as both the price and the business continue as normal.
The rapid expansion in Bitcoin price and mainstream adoption through the latter part of last year was seemingly matched by an increase in scrutiny and reflection by government regulators in early 2018.
It has turned into a battle for some, a lesson in learning for others, and a chance to embrace for the remainder as different nations approach cryptocurrencies, and their associated facets such as ICOs and Blockchain technology, differently.
Many countries are still sitting on the fence, waiting to see how cryptocurrencies, and particularly Blockchain, can be utilized and implemented within their laws and regulations, while some, most notably China, have forged ahead with a harsh and hard-line approach. China has moved towards quashing cryptocurrency in three stages, first banning ICOs, then exchanges, and finally blocking foreign cryptocurrency sites from its citizens with a massive firewall to try and nail the coffin shut.
However, the successes of outright bans and hard-line regulation should really be questioned as Ronnie Moas, famed stock picker who has become somewhat of a champion for cryptocurrencies says that the fear and damage regulation does to the strength and price of Bitcoin is “only noise.”
No one-eyed approach
Moas, sporting an eye-patch due to a diagnosis of Bell’s Palsy, a treatable a condition that causes temporary weakness or paralysis of the muscles in the face, spoke to Cointelegraph about the effect hardline regulation will have on cryptocurrency.
“I don’t pay too much attention to these [regulations]. It is only noise as far as I am concerned unless China, Russia, the US and South Korea come out with some explosive joint statement on the same day, I wouldn’t pay too much attention to this. Bitcoin is not going anywhere,” Moas said definitely: “There is a mind-boggling demand and supply imbalance and I expect it will drive the price to $50,000 or $100,000 over the next few years, regulation or no regulation.” He recommends not to overprice the value of China market:
“If China bans Bitcoin, 190 countries around the world are more than happy to buy whatever they are selling. If China dumps Bitcoin on the market, it goes on sale, and people will scoop it up in a fire sale, I am not worried about that. Look at what happened two weeks ago; something caused Bitcoin to drop to $6,000 and look where it is now, over $11,000; 80 percent in two weeks. You have to just disregard all the noise.”
Indeed, Bitcoin has shown on a number of occasions it can bounce back from damaging news, including fake news and FUD. In February, there was confusion surrounding a potential trading ban in South Korea, which saw Bitcoin’s price slump, but it has since gotten over that hurdle. Furthermore, there was even a misinterpretation of an Indian budget speech about a Bitcoin ban in that country which affected the price, and again, Bitcoin showed enough resiliance to bounce back.
However, in China, there has been hard news emanating from as high up as the Communist Party Congress that Bitcoin will not be tolerated in the People’s Republic. However, how effective, on ground level, has their bans and regulations been? The most recent move to ban access to foreign Bitcoin sites and exchanges showed a glimpse behind the iron curtain on the war that was being waged. China was already struggling to lay a killing blow by clamping down on Chinese exchanges, but it was revealed it was totally losing the war. In Moas opinion, it will be the calmer heads that prevail:
“There will be regulation, but it will be for the fringe elements in the arena. I don’t think this will impact the major exchanges. I don’t think it will impact Bitcoin or Ripple, or Cardano. I think people are making too much out of this. I don’t care if 90 percent of the names here are scams, low quality, high risk, pump and dump names, because 95 percent of the market cap is concentrated in the top 20, and that is really all anyone sophisticated and mature would be focusing their attention on.”
The other side of the Iron Curtain
Looking from the outside on a place like China, one does have to question if the government has been successful in eliminating Bitcoin with its hard-line regulations. Bitcoin price is on the rise, the general feeling globally is that the cryptocurrency space is a good one, and the technology continues to flourish. So, what is happening in China, or to be more correct, what are Chinese Bitcoiners and Bitcoin companies doing among the regulations?
Huobi, one of the largest cryptocurrency exchanges that was originally founded in China, is one Bitcoin company that was definitely affected by the regulations in China but is one that is making alternative arrangements. Herbert Sim, part of Huobi’s digital marketing team, spoke to Cointelegraph about how the company has had to deal with the crackdown. “Huobi Global main operations are now currently out of Singapore, with its other office across the global in major cities such as Hong Kong, Korea, Japan, and more recently in San Francisco,” he said, indicating that they can of course no longer directly operate from mainland China:
“Cryptocurrency is a completely new industry, one that governments from around the world are experimenting and figuring out how to govern it properly with policies in place. But as they are in the process of this experimentation, it is also up to the cryptocurrency exchanges themselves to first self-regulate.”
Essentially, Huobi has been able to roll with the punches in terms of the Chinese government’s rules, and instead of fighting to not be controlled, they are looking to impose their own safety checks and regulations to make them more appetizing to hard-lined regulators.” Robin Zhu, Chief Operating officer of Huobi, added:
“We have taken the initiative to launch user security and protection Initiatives such as the ’User Protection Fund’ and the ‘Security Reserve’; and a world first autonomous token listing exchange, HADAX; and increasing our Customer Service headcount to more than 250 people, across multiple time zones and multi-language support.”
So, it would seem, that in the case of Huobi at least, the China crackdown has not stunted their work, as they have pushed beyond the walls of the People’s Republic, and as Sim adds: “Our client base has still been steadily increasing on an exponential rate. Our China user database is still accessing as per normal as we are an international, global brand.”
Regulation is necessary
There is no denying that regulation needs to come to the cryptocurrency space. It has gotten to a point where it is too big to ignore and needs to fit into the global society, and the rules that are already in place as parameters. Many countries are excited and keen to see what cryptocurrencies can bring, with only a few really trying to stamp it out. But for those who believe they can eradicate it, it would seem that that path is a difficult and foolhardy one. Bitcoin is global enough and demanded enough that people will either make a way to get at it of they are blocked, or those around who aren’t blocked will gleefully take up the slack.
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Author: Darryn Pollock